Prosperity as Human Development, not Wealth

The main thesis of our lecture is that our quest for prosperity has failed to deliver the sought-after goals because we have misunderstood the meaning of prosperity , and looked for it where it cannot be found. We base our economic policies on modern economic theory, which is based on the amazing assumption that human beings act to maximize lifetime consumption, since this is the sole source of human welfare. Human beings are far more generous and cooperative than the assumptions of economic theory allow for. Even more important is Richard Easterlin’s discovery that enormously increased levels of consumption do not bring about corresponding increases in happiness. Consumption only brings short-run happiness; long-run happiness has no correlation with consumption, and is far better correlated with character traits like generosity and gratitude. Mindless pursuit of wealth, implemented by policies to maximize growth, has led to increasing misery, instead of prosperity . Growth-oriented policies have destroyed family lives, engaging all members in production of wealth, and they have damaged our environment, destroying the future of our species for short run gains. Can this damage be reversed? Can we improve human lives and welfare, and also stave off the impending environmental crisis? At the core of the crisis we face is the prioritization of wealth over human beings. A market economy cheapens human beings because it is based on the idea that human lives are commodities for sale in the labor market. Reversing these priorities requires the recognition that all human lives are infinitely precious, with amazing potentials and capabilities for growth in dimensions unknown. Taking this principle seriously would require re-writing all economics textbooks, and radically re-organizing our economic, political and social institutions. Taking collective responsibility to ensure that all members of a society get the chance to develop their capabilities would be a new definition of prosperity , very different from GNP per capita, which is the current focus of policy makers across the globe.

Modern economic theory makes accumulation of wealth the goal of economic activity, and values human lives only to the extent that they contribute to production. How can we reverse these priorities, putting the enrichment and empowerment of human lives at the center, and valuing wealth only to the extent that it is helpful in achieving this goal? The first requirement is to win the battle of ideas, creating consensus on the prioritization of human beings over material wealth. To do this, we need to recognize modern economic theory for what it is, instead of what it claims to be. To accomplish this goal, it is useful to label modern economic theory as Economic Theory of the Top 1% — or ET1% — and explain how all aspects of this theory are designed to portray increasing wealth of the top 1% as the goal of society, and also to show that this serves to benefit the entire society. For example, use of GNP per capita as a yardstick of social welfare exactly fits this description, since gains to the top 1% are first divided over the entire population and then measured, thus appearing to be generally beneficial, when in fact they are not. Overcoming this deception will involve replacing ET1% by ET90% — a new economic theory for the bottom 90%.

Karl Marx clearly recognized the deceptive nature of economic theory, and stated that functioning of capitalism requires convincing the laborers of the necessity and fairness of their own exploitation. ET1% does this by arguing the growth is the best policy to pursue for all, since benefits which obviously accrue to the rich will eventually trickle down to the poor. In contrast, Marx offered us ET90% by asking for a shift from each according to his abilities (to gather wealth) to “each according to his needs”, thereby prioritizing the needs of the poor over growth to provide more wealth to the already wealthy.

As a prescription for change, Marx urged the laborers of the bottom 90% to unite, and throw off their chains. Experience shows that we can successfully unite laborers to revolt against the capitalists, but after the revolution, control necessarily remains in the hand of a small minority. The nature of power is such that this small minority is likely to be corrupted by it, and use it for personal gains, and to oppress the majority. Just like democracy has failed to give ‘power to the people’, so alternative systems of government also fail.

The Islamic solution works along different dimensions. It seeks to co-opt the rich and powerful, instead of killing them off, and replacing by another set of rich and powerful. This is done by creating social norms of generosity and social responsibility. Fourteen centuries ago, the revolutionary teachings of Islam led backwards and ignorant Arabs to world leadership. These teachings include the ideas that the best leader is the servant of the people, that power is given to us in order to protect the weak, and wealth is meant to be given to the needy. Widespread acceptance of these ideas created a society which provided basic needs, health care, and education to all members using the institutions of Waqf, and the norms of collective social responsibility and brotherhood. Because these ideas have been forgotten, they continue to have the same revolutionary potential today, as they did 1400 years ago. The most important first step in this revolution is sensitizing our hearts to feel compassion for sufferings of all mankind. The feeling that all of the creation is the family of God, and service to humanity, and all living creatures, is the highest form of worship, is essential motivation for the Herculean efforts required to create revolutionary changes required to reverse the increasing concentration of wealth at the top and misery at the bottom.

Follow Blog via Email

Enter your email address to follow this blog and receive notifications of new posts by email.

Advertisements

8 comments

David Harold Chester said: January 14, 201810:02 am

It would appear that this article is being based on human relationships or a friendly and cooperative kind. This is a beautiful approach to the problems of this world but it is not economics, which is based on what were can gain with hard work of the least amount for its unlimited produce. It is important to recognize that the Christian charitable ideals that led to Socialism were not aimed at efficient production, but in inefficient sharing and that ethical as this trend surely is it is not economics.

Cold hard fact is that most people in the real world act on their own individual interests before the interests of the community this seems to be almost a genetic trait quite hard to reprogram. As Winston said capitalism has a lot of faults but it sure beats all the other political systems of government.

Thanks good response, a more positive view of the world I am glass half empty guy.

Craig said: January 14, 20189:18 pm

Sorry, but that’s missing the point. The point and the problem IS that economics ISN’T addressing full human reality….and the reason why is because the monopolistic monetary paradigm of Debt ONLY enforces systemic austerity despite our tremendous capability to produce AND DISTRIBUTE…unless we’d awaken to the new monetary paradigm of Direct and Reciprocal Monetary Gifting….and apply monetary policy at the single aggregative and integrative point in the economy, namely retail sale.

Monetary Gifting is simply a monetarily/economically reflective aspect of the most integrative human mental and emotional state AKA graciousness which, whichever of the world’s major wisdom traditions may call it IS their pinnacle concept and experience.

So again, if we want to insist on merely pursuing the obviously failed and non-inclusive experiment with economic theory insisting that homo economicus be the only pattern….then we’ll never enable the fruits of our true and correct species designation homo sapiens, i.e. wise and discerning man.

Economics? “When I use a word”, H. D. Chester said in a rather scornful voice, it means just what I choose it to mean – neither more nor less”.

“The question is”, said Alice, thinking that to Aristotle it meant ‘household management’, to St Paul ‘earning one’s keep’, to the Benedictines something like ‘household development’ and to catholic Christian Aquinas ‘community provisioning’, “whether you can make words means so many different things”.

Well, I for one refuse to accept that ‘economics’ means ‘efficient production’ just because Mr Chester says that’s what it means. A thing is what it does, and the global economy cannot be efficiently provisioning even its fortune-seeking financiers for it is producing waste and pollution on a world-threatening scale. What I do accept is C E Shannon’s argument that we have far more production capacity than we need, and the redundant capacity can – in present circumstances must – be used for error correction. That involves understanding the truth that money is merely a symbol of credit which enslaves us if we mistake it for monetary debt. We give each other credit, and like St Paul are worthy of it when we try to earn our keep.

I understand this lecture was given in Islamabad, so I merely observe that the admirable economic philosophy of the Muslims was already present in Christian teaching and historically probably derived from it. Better pointing that out to Christians and working with them rather than letting misrepresentation generate extremism by our silence.

Beautifully said, davetaylor1. I like starting my day with Asad Zaman’s refreshing common sense as he reminds us of the worth of all human beings. It reminds me that even in New Zealand, the home of the neoliberal economic experiment, despite all the damage and harm that has been done in the name of one version of economics, people here still care about collective good, about the potential in all of us, and restoring the environment, as part of sustainable and forward thinking economics.

Thank you for this. Interesting that there are two NZ comments here. With family there, I was in NZ when your “neoliberal experiment started”, bought Roger Douglas’s book “Towards Prosperity”, and corresponded with your recently acting Prime Minister Geoffrey Palmer about the folly of it [i.e. replacing cooperative agricultural marketing with reserve banking].